Isolated rat liver mitochondria are being studied to determine the physiochemical properties of the internal aqueous phase. This matrix phase is normally assumed to have properties of bulk aqueous solutions; however previous studies with nonelectrolytes have clearly shown this assumption to be incorrect. This finding has important consequences for the calculation of protonmotive force, delta pH and membrane potential from ion distributions, in which activity coefficient ratios are normally assumed to be 1.0. A heterogenous two-phase model, in which one phase is "bulk" and the other is "abnormal" in its solution properties has been found to be consistent with nonelectrolyte distribution data. This model will be evaluated by varying matrix water content and concentrations of antipyrene, which is concentrated in abnormal water, and dimethylsulfoxide, which is excluded from abnormal water. Distributions and water contents are obtained from radioactivity measurements. These studies have led to an hypothesis of mitochondrial volume homeostasis. Ion electrode kinetic studies have shown mitochondria to have a passive K/H exchanger which is inhibited by Mg ions. The exchanger is released by swelling, by anions with high affinites for Mg ions, by Ca ions uptake and by tetraethylammonium uptake. A Mg-controlled K/H exchanger can be shown to provide a dynamic, finely tuned mechanism for matrix volume homeostasis in vivo, and disruptions of this mechanism may be responsible for mitochondrial swelling observed in some pathological conditions.